Gov’t ready with plans to stimulate slow economic sectors

AMMAN — The government on Wednesday announced a package of incentives to stimulate the real estate sector, which is witnessing a slowdown after record high trading last year.

Under these measures, the first 150 square metres (sq.m.) of apartments sized 180sq.m. or less are exempted from registration fees.

Any apartment that exceeds 180sq.m., buyers will pay the registration fees without exemptions, according to Prime Minister Abdullah Ensour.

At a press conference on Wednesday, Ensour said other decisions include exempting non-Jordanian investors from fines with stumbling investments.

He explained that those who bought lands for certain purposes and could not realise their investments before the deadline will be exempted from the fines.

According to the law, lands bought for housing projects should be invested within three years, while those bought for agricultural purposes should be invested within five years. 

If they exceed the deadline, an annual fine of 5 per cent of the value of lands is imposed on investors. 

According to regulations, they cannot sell the land during the set period, but under the new Cabinet decision, they are allowed to.

Mohammad Sawafieh, head of the legal unit at the Department of Lands and Survey (DLS), said the value of fines imposed on the stumbling investments is not fixed.

However, fines generated last year stood at JD1.4 million, JD2.4 in 2013, and JD1.6 in 2012. 

The new decisions, according to the premier, are valid until end of this year, unless amendments to the Investment Promotion Law, which govern the process, are introduced.

The government package comes after real estate trading during the first six months of 2015 saw an 11 per cent drop to JD3.42 billion from JD3.84 billion recorded during the same period of 2014.

In June alone, real estate trading dropped by 18 per cent to JD595 million from JD727 million in June 2014, according to report issued by the DLS on Sunday.

As a result of the decline, government revenues during the January-June 2015 declined by 13 per cent to JD182.7 million from JD209.7 million collected in the same period of the previous year.

Real estate trading last year registered a record JD7.76 billion, 22 per cent higher than the amount in 2013 when it stood at JD6.34 billion, the DLS said on Monday. In its annual report, the DLS revealed an overall 105,643 real estate transactions were registered in 2014, an increase of 7 per cent compared with 2013.

He also noted that the government is implementing reforms related to several sectors that are witnessing recession.

Authorities, he explained, started taking measures to stimulate the tourism sector and will soon announce measures related to the transport sector.  

The incentives are expected to breathe life into these industries and contribute to the growth of allied sectors, according to Ensour, who added that although the first half of the year witnessed economic recession, the second half of the year is expected to witness recovery. He attributed the slow economy to the delay in endorsing the 2015 state budget till March.

Meanwhile, the government also announced that it has borrowed a local bond loan of JD200 million. Of the total loan, JD150 million will be used to reimburse owners of lands acquired by the government for public service purposes, while the remaining JD50 million is allocated for tax refunds. Some JD37 million of the acquisition reimbursements have has already been paid, Ensour said.